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The dollar was quite subdued in European trade as the risk mood improved. Investor confidence in the banking sector remained weakened despite First Citizen’s move to buy Silicon Valley Bank deposits and loans. The Bank of Japan prepares to welcome the new Governor as Haruhiko Kuroda leaves office. The US economy may be closer to a recession following the recent stress in the banking sector.
AUDJPY rallied by +1.29% amid a mixed mood ahead of the Australian CPI and retail sales data this week. In Japan, the Yen weakened against the AUD as Kazuo Ueda is set to take over from Haruhiko Kuroda as BoJ Governor in April. The incoming Governor made it clear that he preferred the easy monetary policy stance at the moment. The pair`s rally faced a hurdle at 87.50 after establishing an intraday low at 86.70. On the downside, AUDJPY bears may take over 86.00.
CADZAR soared by +0.97% buoyed by rising crude oil prices at the start of the week. The Canadian dollar also got a boost from a jump in retail prices that resumed hopes of continued monetary tightening by the BoC. Later this week, the central bank of South Africa will be meeting where a 25bps rate hike is anticipated. The pair rose from 13.20 as targets on the upside may be seen at 13.40 and 13.50.
EURGBP dipped -0.22% below the 0.8800 mark despite pleasing data from Germany. The German Ifo Business climate index rose more than expected in March to 93.3 from 91.1. Last week ECB President Christine Lagarde indicated that the banking sector in Europe remains healthy as a result of a strong regulatory regime. Traders await the Bank of England Governor Andrew Bailey’s speech scheduled for the New York trading session. This along with speeches from ECB members, Schnabel and Elderson, are to provide fresh impetus. Further down, bears may revisit the 0.8770/0.8750 area.
European stocks surged following better-than-expected Eurozone data. UK100 advanced by +0.64% and critical levels to watch out for are 7500 resistance and 7400 support. DAX added +0.84% of gains as bulls continue to hold above the 15000 support and upside gains could be challenged by the 15300 resistance. CAC40 soared by +1.11% towards the 7150 resistance level and a failure to break below that level could trigger selling pressure towards the 7000 support.
US stock futures rallied early Monday as banking crisis fears faded after the SVB deal. The US500 futures rose by +0.53% after bulls bounced above the 3900 near-term support and upside gains were capped by the 4050 level. US100 futures were slightly up by +0.14% as yields remained capped by the 12900 resistance. On the downside, 12500 remains the next key support. US30 futures recovered by +0.58% after finding near-term support at the 31800 level and the next key resistance is at the 32500 level.
In commodities, gold plunged as yields rallied early Monday. The yellow metal was down -1.37% from the 1980 level and the near-term target is at the 1930 level. A break below that level could see extended targets at the 1900 level.
